Is Google Ready to Enter Into a Price War With the Likes of Apple?
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5. The investment is too high
Although investing in a new
operating system is expensive, its no match for the research and development
and production costs that go into hardware. Hardware is extremely expensive to produce, and in far too many cases, delivers
small margins. Its best for Google to stick with high-margin businesses and
let Apple try to make profits on expensive equipment.
6. A price war Google cant
win
Following that, Google should be
ready to enter into a price war with Apple if it ever decides to try hardware.
Apple will press the envelope on design and features, forcing Google to catch
up. Meanwhile, the iPhone makers margins will stay strong. Plus, Apple can
dump billions of dollars into research and development without even thinking
twice about it. Getting into a price war with Apple is something the search
giant just wont want to do.
7. Too many competitors
Right now, Google is doing well
in markets where it has little competition. In search, its only real concern is
Microsoft, and Bing has little market share. In the OS space, Android is the
only suitable choice for any vendor not named Apple. In the advertising market,
Google is pretty much the only company that matters. But in hardware, the
company would be facing off with a slew of competitors. And theres no telling
if its devices will shine or get lost amid all the others.
8. The Sony model is dangerous
The latest rumors surrounding
Google seem to suggest that the company is trying to become more and more like
Sony and get into every market that it can. Its a bad idea. Sony today is
floundering because it took too many risks and tried to do too much. Theres
something to be said for sticking with core competencies. And for Google, that
means search, advertising, and Androidnot tablets, smartphones, and
home-entertainment devices.
9. Home entertainment issues
are enough to make trouble
What makes Google think that it can be successful developing a home entertainment device? The company is trying to appeal to
consumers in the living room with Google TV, and so far, its failing.
Delivering a device that will likely work with Google TV wont change the fact
that the entertainment platform falls short on many levels, including content
support.
10. It all comes back to
advertising
When its all said and done,
Google does everything to enhance its advertising initiatives. Whats not clear
is how advertising will play into its decision to get into hardware. Chances
are, its ads will be running on the software included in its hardware products.
But how will consumers respond to that? Hardware and advertising dont
necessarily play nice with each otherand Google should accept that.
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